ACIT 13(3)(1), MUMBAI vs. REKHA HIRALAL MULCHANDANI, MUMBAI

Smt. Rekha Hiralal Mulchandani This is an appeal filed by the Revenue and Cross Objection by the assessee against the order of CIT(A)21, Mumbai dated 19/12/2016 for A.Y.2013-14 in the matter of order passed u/s.143(3) of the IT Act, 1961.

In this appeal filed by Revenue, Revenue is aggrieved for deleting addition of Rs.65 Lakhs made u/s.54, whereas in the Cross objection assessee is aggrieved by the action of CIT(A) for upholding addition of Rs.1,81,000/- u/s.68 of the IT Act.

Nobody appeared on behalf of the assessee inspite of giving opportunity nor any adjournment petition was filed. Accordingly Bench decided to dispose the appeal after hearing learned DR and considering the material placed on record.

At the outset, learned DR submitted that tax effect in the appeal filed by the Revenue is less than Rs.20 Lakhs, accordingly the appeal so filed by the Revneue deserves to be dismissed in view of the CBDT Circular No.03/2018 dated 11/07/2018.

In the Cross Objection, assessee is aggrieved for confirming the addition of Rs.1,81,000/- u/s. 68 of the IT Act.

We have gone through the orders of the authorities below and found that addition so made by the AO u/s.68 in respect of cash deposited in the bank account. The AO noted from the bank statement that there are various cash deposits during the year which were not reflected in the cash book of the assessee company. Shri Mahesh Smt. Rekha Hiralal Mulchandani Mulchandani whose statement was recorded by the AO could not reconcile the same. The deposits were as follows: Date Amount 11.10.2012 32000 19.10.2012 50000 30.11.2012 50000 11.02.2013 49000 Total 1,81,000

By the impugned order, CIT(A) upheld the addition after observing as under:- “5.3. I have considered the submissions and paper book filed. The personal cash book does refer to the impugned deposits in the New India Cooperative Bank sb account no 13510 of the appellant at Goregaon branch, Mumbai. However, the personal cash book has mainly credits of Rs 12500 per month as salary from Rahi Electronics Pvt. Ltd. It is the claim of the appellant that the deposit is out of the opening balance in personal cash book of Rs 435,600/- It is noted that the personal balance sheet of the appellant is not filed in the paper book filed in the appellate proceedings. Such cash balance is not reflected in the schedules of the return of income / filed electronically. Thus the opening balance claimed cannot be verified from any contemporaneous records of information filed. A perusal of the personal cash book statement shows that the cash balance as on 20.03.2013 is a negative cash balance of Rs 11637/- even if the opening balance is considered as Rs 4,35,600/- This clearly shows that the personal cash book is not reliable. In these facts the addition made by assessing officer is upheld and ground of appeal no 2 is dismissed.